The Central Bank of Kenya (CBK) has given banks the go-ahead to resume blacklisting loan defaulters who had been pardoned as part of the government’s measures to cushion Kenyans against the burden of the Covid-19 pandemic
This means the banks are now free to forward the names of the defaulters to the three Credit Reference Bureaus (CRBs) – Metropol, TransUnion, and Creditinfo International – for blacklisting.
“The point here is to emphasize we are going back to the normal operations, the way things used to happen and that’s where we will be from October 1. They will give you 30 days so you have three months to regularise whatever you had not paid,” CBK Governor Dr. Patrick Njoroge said while refusing to extend the 6-month moratorium that expired on September 30th.
The number of Kenyans listed in the CRBs before April 1 was about 3.2 million and the number is projected to rise by thousands by January.
Data from the banking sector shows that workers and businesses defaulted on loans worth Sh30 billion in the four months to June.
The ratio of non-performing loans rose from 12.7pc in February to 13.6pc in Augus. This is the highest spike since August 2007 when it stood at 14.41pc.
On March 25, 2020, President Uhuru Kenyatta had ordered the temporary suspension of the listing with CRB of any person, Micro, Small and Medium Enterprises (MSMES) and corporate entities whose loan account had fallen overdue or is in arrears, effective April 1, 2020.
Kenyan Business Feed is the top Kenyan Business Blog. We share news from Kenya and across the region. To contact us with any alert, please email us to [email protected]